Punjab shawl industry to grow 10-15% this year

Exports sluggish but early winter in northern India, wedding season drive sales

A significant increase in the prices of woollen yarn over the past one year and the slowdown in the European markets have failed to dampen the spirits of Punjab’s shawl industry. Putting last year’s negative growth of 25 per cent behind it, it is expecting a 10-15 growth this year.

Manufacturers, most of them SMEs, are bullish about the domestic market, which contributes 80-85 per cent of the total sales. They said the early winter in many parts of northern India and the wedding season were driving demand. As a result, they expect to clear last year’s inventories of unsold goods.

The industry’s overall revenues are Rs 2,000-2,500 crore and there are 250-300 units, employing more than 100,000 people directly or indirectly.

Manufacturers have started blending wool – the major raw material – with other raw materials like viscose, acrylic and polyester to control the cost of shawls. So, there has been no major increase in shawl prices, which is a key reason behind the increase in demand, too.

Piare Lal Seth, general secretary of the Shawl Club (India), Amritsar, told Business Standard, “The early winter this year, which has gripped many parts of India, has boosted the demand for shawls and stoles in the domestic market. Besides, the marriage season is also a contributory factor behind the increase in demand. We expect that not only will the pile of inventories be cleared but fresh production will be consumed.”

“As far as exports are concerned, they will be down by about five per cent owing to the European crisis. But, despite that, we are expecting overall growth of 10-15 per cent this year,” he said.

On the impact of high wool prices, he added, “Since last year, yarn prices have almost doubled. While last year it was Rs 600 per kg, this year it touched Rs 1,150 per kg. In order to control input costs, manufacturers have started blending wool with viscose, polyester, acrylic, among others. Due to blending with other material, prices have been controlled and sales in the domestic market are unaffected.”

Manufacturers say Indian shawls had become an international “statement” and this had boosted exports from Punjab some years ago. But since last year, exports have not been doing well, owing to the European crisis. A few years ago exports had touched Rs 600 crore, but last year they were Rs 300 crore. This year exports are expected to be Rs 300-350 crore.

“There is demand from the export market, but the export market is down by up to five per cent,” said Kamal, proprietor of Amritsar-based Shawl Heaven. Shawls manufactured in Punjab are exported to Australia, Europe, Japan, the Middle East and the United States.

To meet international standards, manufacturers have invested in designs, colour, quality wool, and also inducted state-of-the-art imported machinery. From a modest beginning in 2002 with two shuttleless looms, the industry now has 350-400 such looms. There are 2,000 traditional looms in the state.

Manufacturers said the introduction of Italian-made electronic shuttleless looms had revolutionised the quality and pace of work. In comparison to traditional looms, shuttleless looms yields fabric of superior quality, they added. However, traditional loom still have relevance, because they costs just about Rs 1 lakh each.

In order to meet rising local demand, many units are planning to expand but there are bottlenecks. Industrialists said that although there is no customs duty on imported new machines, the government does not provide a subsidy under the Technology Upgradation Fund (TUF) scheme. The TUF scheme is valid only for old machines. “It should be applicable to new machines, so that we can install new machines,” said Seth.